Gail Tverberg's Contributions

The standard way to make forecasts of almost anything is to look at recent trends and assume that this trend will continue, at least for the next several years. With world oil production, the trend in oil production looks fairly benign, with the trend slightly upward (Figure 1).

The story of energy and the economy seems to be an obvious common sense one: some sources of energy are becoming scarce or overly polluting, so we need to develop new ones.

What is behind the Russia/Ukraine problem? It seems to me that what we are seeing is Russia’s attempt to fix a two-part problem...

In my view, oil and gas resource limits are major contributors to the conflict in Syria. This is happening in several ways...

We live in a finite world. Clearly, a finite world has limits of many kinds. Yet economist and other researchers use models that assume that these limits are unimportant for the foreseeable future.

We know the world economic pattern we have been used to in years past–world population grows, resource usage grows (including energy resources), and debt increases.

The US Energy Information Administration recently released its report showing oil consumption by country updated through 2012.

We have all heard the story about oil supply supposedly rising and falling for geological reasons. But what if the story is a little different from this--oil production rises and falls for economic reasons?

We in the United States, the Euro-zone, and Japan are already past peak oil demand. Oil demand has to do with how much oil we can afford. Many of the developed nations are not able to outbid the developing nations when it comes to the world’s limited oil supply.

Based on the sound of the name renewable, a person might think that using only “renewable” energy is ideal–something we should all strive to use exclusively. But there are lots of energy sources that might be called “renewable,” and lots applications for renewable energy. Clearly not all are equally good. Perhaps we should examine the “Renewables are our savior,” belief a little more closely.

If an economy is growing, it is easy to add debt. The additional growth in future years provides money both to pay back the debt and to cover the additional interest. Promotions are common and layoffs are few, so a debt such as a mortgage can easily be repaid.

We are used to expecting that more investment will yield more output, but in the real world, things don’t always work out that way.

United States oil consumption in 2012 will be about 4.7 million barrels a day, or 20%, lower than it would have been, if the pre-2005 trend in oil consumption growth of 1.5% per year had continued. This drop in consumption is no doubt related to a rise in oil prices starting about 2004.

There is ample evidence that spikes in oil prices leads to recession, at least in the US, which is an oil-importing nation. James Hamilton has shown that 10 out of the last 11 US recessions were associated with oil price spikes.

A person might think from looking at news reports that our oil problems are gone, but oil prices are still high.

We have been hearing a lot about escaping the fiscal cliff, but our problem isn’t solved. The fixes to date have been partial and temporary. There are many painful decisions ahead. Based on what I can see, the most likely outcome is that the US economy will enter a severe recession by the end of 2013.

Most of us have heard that Thomas Malthus made a forecast in 1798 that the world would run short of food, and that great famine would result. But most of us don’t understand why he was wrong.

The “standard” way of looking at government income and expense is as a percentage of GDP. As a practical matter, though, about 80% of federal taxes relate to individuals, so it makes more sense to me to use a wage base for comparison, especially if there is concern that wages aren’t keeping up with GDP.